0 Canada Bleeding Private Jobs; Vancouver Home Sales Plunge 16.7 Percent; Crash Awaits

The Financial Post has an interesting story on the state of the Canadian jobs market. It seem over 100% of job growth is from government jobs.

Please consider Employment numbers hide the fact Canada is bleeding private sector jobs

Canada may have added 1,800 jobs in October, but that number hides the fact that almost all the gains came from government and that the private sector lost more than 20,000 jobs.

The 1,800 jobs added was already a disappointment compared with the 10,000 economists had forecast. According to Statistics Canada, that left the unemployment rate unchanged at 7.4%.

The six-month average for jobs gains is now 29,400, according to Reuters. But it’s a very different story when you look at the private sector and public sector separately.

“Details of the report were much worse than the headline number with the private sector showing a loss of 21,000 in October, the fourth decline in six months,” said Matthieu Arseneau, senior economist with the National Bank of Canada. “Over the period, the private sector is actually showing a loss of 12,000 jobs, compared to a surge of 76,000 jobs in the public sector.”

“With earnings of TSX companies down 30% so far in the third quarter, we do not expect a hiring spree anytime soon,” he said.

It is good to see realistic comments from analysts. Matthieu Arseneau, is spot on with his comments.

Vancouver Home Sales Plunge 16.7 Percent

The Globe and Mail reports Vancouver home prices sink 3.4% from peak as sales plunge

Home sales in the Vancouver area plunged 16.7 per cent in October from a year earlier, though picked up markedly from September.

In an indication of how that market’s performing, sales were 28.5 per cent below a 10-year October sales average of 2,700, the Real Estate Board of Greater Vancouver said today, while the composite benchmark price for residential properties is down 3.4 per cent from its peak of $625,100 in May.

Along with Toronto, Vancouver has been a worry spot for observers. The country’s housing market has cooled notably since the latest round of government efforts to tighten the mortgage market, though most economists don’t envision a meltdown.

Economists never envision a meltdown. But a massive meltdown is coming anyway. I must admit the pool of greater fools in Vancouver and Toronto was far, far bigger than I thought possible, but at long last the pool seems to have dried up. A crash awaits.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

0 Mish on Capital Account: Jobs, Real Wages, Income Distribution, Fiscal Stimulus

On Friday, I once again had the pleasure of being on Capital Account, live television with Lauren Lyster. I believe you can pick up the show on Comcast but it is not available on ATT U-verse, at least in my area.

We discussed the latest jobs report, real wages, Keynesian stimulus, income distribution, taxes, and other topics.

I come in at about the 3:00 mark, but the first few minutes of Lauren are entertaining as usual.




Link if video does not play: What Happens When Jobs Rise But Leave Wages And Living Standards Behind?

Here are a couple of charts from my Friday Jobs report (see Nonfarm Payrolls +171,000, Unemployment Rate 7.9%; Good All Around Numbers), that we discussed in the video.

Index of Aggregate Weekly Hours



The index of aggregate hours paints a good picture of the stall in the recovery. Employment is up, but hours are not up proportionally. This reflects the trend to part-time workers and the reduction of hours in part-time workers.

Average Hourly Earnings vs. CPI



Average hourly earnings has been falling for years and lagging CPI inflation since September 2009. Simply put real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly.

Income and Wealth Distribution

We also discussed income and wealth distribution and what causes the inequity. In case you missed it, please check out my detailed description in What's "Really" Behind Gross Inequalities In Income Distribution?

I had a fun time on Capital Account as usual, and will be back on the first Friday of every month to discuss jobs.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

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0 Law of the Funnel

I received an interesting email from Hugo Salinas Price in response to Reflections on "Moral Choice" and the Definition of "Temporary"

Hugo writes ...

Hi Mish!

Thanks again, for the mention!

It's odd that only those who are to pay, have to make a "moral choice". In Mexico, we call this "La Ley del Embudo" ("The Law of the Funnel"): at the wide top end the 99% contribute, at the bottom narrow outlet the 1% collect.

I think many good teachers would make the right moral choices, but as the California law now stands, they are actually prevented from making any choice, since their money is taken from them and they have no say in how it is to be used.

Used to be that great teachers - I had one, God bless him - taught because they loved to teach children, and lived very modestly indeed.

Best wishes

Hugo

Law of the funnel certainly describes the economic results we see.

Here are links to Hugo's two most recent articles.

• Reflections on the effects of War as compared to the effects of Fiat Money
• The house has burnt down

The first link above is on fiat money vs. gold, and the second is about the crisis in Europe.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

0 Spain Still Has 60,000 More Public Employees Than in 2007

Spain is finally shedding some public workers, but the total is still substantially above the number employed at the peak of Spain's property bubble.

Via Google translate from Libre Mercado please consider Spain Has 60,000 More Public Employees Than in 2007

The Labour Force Survey (LFS) for the third quarter confirmed the trend that has been recorded in recent months in terms of job losses in the public sector. Specifically, the number of employed fell by 96,000 from the second quarter, reaching a total of 17.32 million, the lowest level since 2003.

However, what is important is that nearly half of job destruction is concentrated in the public sector: 49,400 jobs, of which 19,600 were permanent and 29,800 temporary workers. Also focused on trimming the regional administration, with a reduction of 44,300 workers in the third quarter

The number of public employees in September stood at a total of 2.99 million, thus lowering the threshold of 3 million for the first time since the third quarter of 2008. Nevertheless, the Spanish public sector still has to this day with more than 59,800 employees at the beginning of the crisis, as in the third quarter of 2007 they numbered 2,931,900 workers.

The reason is the substantial increase in contracts that government made during the crisis. Thus, despite the financial meltdown, the subsequent recession and the increasing deficit, politicians, far from adopting the necessary austerity, fired their workforces over the past few years. While in late 2007 Spain had about 2.9 million public employees, in the third quarter of 2011 the volume amounted to 3.22 million, a record of history. That is, public sector workers increased by 350,000 in crisis: some 45,000 in central government, another 45,000 in the Local and nearly 250,000 in the CCAA.



These excesses corrected only started late last year. Since the third quarter of 2011 to third in 2012, the public sector has slimmed its workforce by nearly 230,000 people, but remains above the figure recorded at the beginning of the crisis in the bubble peak. And indeed, this setting has accelerated in recent months: the Spanish economy has destroyed 836,000 jobs in the last year, of which almost a third are concentrated in the public sector, but in the last three months, half the work proceeds and destruction of government.

Spain needs to shed a lot more public workers instead of hiking taxes. The latter strategy backfired already. For details, please see Retail Sales in Spain Plunge 10.9%, Largest Drop on Record; All Pain, No Gain.

Should Spain further reduce public workers, here is the critical question: will those workers revolt? The popularity of prime minister Mariano Rajoy is low and sinking fast, and a number of regions in the country are threatening secession, so his hands are more than full already.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com

0 Global Manufacturing Contracts 5th Consecutive Month

Markit reports Global manufacturing contracts for fifth consecutive month

The downturn in the global manufacturing sector moderated in October. The JPMorgan Global Manufacturing PMI™ – a composite index produced by JPMorgan and Markit in
association with ISM and IFPSM – rose for the second month running to reach 49.2, its highest reading during the current five-month period of contraction.

The sector continued to report declining volumes of production and new orders, although rates of contraction were slower than in the previous month.

Signs of excess capacity were present in the global manufacturing sector during October. This was highlighted by a further marked reduction in backlogs of work, which
fell for the seventeenth successive month and at the joint-fastest rate during that period.

Global PMI



Manufacturing is leading this global decline. Retail and services will follow.

I have very little to add here other than a note that this certainly was not unexpected in this corner.

Mike "Mish" Shedlock
http://economic-trends.blogspot.com